Holding the New Taxpayer Advocate's Feet to the Fire
W. Val Oveson says he's the taxpayer's pal, but he's already hearing from critics
When W. Val Oveson accepted the job of National Taxpayer Advocate on Aug. 10, he let himself in for a couple of headaches. As the first occupant of an office with newly beefed up powers to cut through the IRS bureaucracy on behalf of both individuals and businesses, he'll be the lightning rod for aggrieved taxpayers from across the land. Moreover, some taxpayer advocates see the selection of a tax establishment insider for this role -- Oveson is currently chairman of the Utah State Tax Commission -- as the equivalent of inviting the fox into the chicken house. So whatever else happens, Oveson can count on being intensely monitored.
An accountant by training, the former Utah lieutenant governor and state auditor strikes the right notes to a public that views the Internal Revenue Service as the Grand Inquisitor. In an interview with Business Week Online, Oveson enumerated reforms he has brought to Utah's tax system. And he said he expects IRS authorities to adopt "a humble attitude" and to lose a tendency to treat taxpayers "as guilty just because they call." The taxpayer advocate's Solomonic new powers include greater authority to unilaterally stop the IRS from seizing taxpayers' property or garnishing their wages.
The IRS's heavy-handed tactics in many such cases in the past are the source of many of its image problems. Oveson isn't the first taxpayer advocate, but the IRS Restructuring & Reform Bill of 1998, which President Bill Clinton signed last month, gives the job new clout and makes it more independent of the IRS commissioner at a time when the IRS is very much on the public hot seat.
Some taxpayer advocates have a simple reaction to Oveson's promises: Prove it. A vocal collection of skeptics, who say they often handle difficult cases for poor clients, openly campaigned against Oveson and for another candidate in the weeks before his appointment. They say it isn't about him personally; most of the critics don't know him. Rather, they argue, his appointment shows that by naming a tax-system insider instead of a fighter for the little guy, the IRS has failed once again to show good faith about instituting reforms. The critics are also concerned by the fact that Oveson's most powerful backer is Utah Republican Senator Orrin Hatch, a senior member of the Senate Finance Committee and its Taxation & IRS subcommittee.
Nina E. Olson, executive director of The Community Tax Law Project in Richmond, Va., says she's disappointed that her preferred candidate, Karen V. Kole, a law professor who runs low-income tax clinics, didn't get the job. But, she insists, her concern is broader than which person gets the job. "The key I was looking for was someone who had actually represented taxpayers. There's a real difference, for those of us who've had hands-on experience dealing with the IRS."
Oveson says his record shows that he'll be a strong champion of the beleaguered taxpayer, especially small businesses. "I have been on the other side of the equation," he declares. "I worked for five years as an employee of a small CPA firm. I operated my own firm. I have been a small-business owner. My first priority," he adds, "is going to be outreach, listening, communications in general. My own experience is that small businesses need the most attention. They bear the full spectrum of the tax requirements and are the least equipped." He adds that he's likely to do some barnstorming around the country to meet with taxpayers.
"We wish him well," says Ann Esarco, president of the Illinois Society of Enrolled Agents, who are private agents licensed to represent taxpayers before the IRS. She also backed Kole, who teaches at the University of Tulsa College of Law. "I hope he surprises us and does the job well."
Oveson says he has already demonstrated that he can. "I've been working for five years to implement changes in a tax agency, in systems that don't lend themselves to change." For example, he says, he was able to cut to 30 days from six months the Utah tax agency's response time for requests to waive penalty and interest on taxes in cases where a taxpayer is bankrupt and unable to pay. One reason, he explains, was that he gave front-line agents greater authority to make decisions. The agency also now encourages taxpayers to respond with a counteroffer even if it rejects their first request for relief. Improving that process at the federal level is a priority of IRS Commissioner Charles Rossotti, says Oveson. He'll report to Rossotti on an ongoing basis, but he also reports directly to Congress on taxpayer treatment issues.
Of course, not all observers see Oveson's appointment with a jaundiced eye. By excluding every category of insider, "you can quickly get to the point where you end up with a small set of not very qualified individuals," points out Martin Regalia, chief economist for the U.S. Chamber of Commerce in Washington, who stresses that he doesn't know Oveson. He adds that the Chamber will keep a close eye for signs of business-as-usual at the IRS and will sound the alarm if it thinks the agency is stonewalling reforms. "We'll have to hold their feet to the fire, the IRS's and the taxpayer advocate," he said.
So it sounds as though Oveson may get a warm welcome when he takes up his new duties in early September -- in more ways than one.
By Julia Lichtblau in New York